Will plan for Korea’s fourth internet-only bank succeed?

Four startups — Lendit, Lunit, Jobis & Villains and Travel Wallet — as well as Hyundai Marine & Fire Insurance jointly formed the U-Bank Consortium earlier this week, aiming to become the country’s fourth internet-only bank. So far, there are three internet-only banks in Korea: Kbank, KakaoBank and Toss Bank.

What is peculiar about the consortium is that its members come from various industries, ranging from fintech, travel and medicine to insurance.

Lendit is a peer-to-peer (P2P) online lending business, focusing on medium-interest-rate loans, while Lunit is an artificial intelligence (AI)based cancer detection and treatment company. Jobis & Villains provides a tax refund service for small business owners and freelancers, and Travel Wallet is the country’s leading company in the area of fee-free foreign currency payment service. Hyundai Marine & Fire Insurance has 69 years of robust experience in the insurance industry, providing financial stability to the consortium.

Blending the variety of specialties, the consortium plans to develop innovative financial products and services through their vast pool of AI-driven big data. While Lendit, which has provided medium-interest-rate loans to over 15 million individuals, will develop a specialized credit evaluation model, Lunit, possessing cancer medical data, will develop customized insurance products and provide information through the digital banking app.

Their key target market, once they succeed in winning a digital banking license from the financial authorities, will be consumers belonging to marginalized communities, such as senior citizens, small business owners and foreign nationals, who are largely ignored by existing online banking services, or who have at least not been the main focus of traditional banking.

“The consortium paid attention to the fact that even though the population aged over 65 continues increasing, and small and medium-sized businesses are accounting for 99.9 percent of the total number of companies, services specifically designed for these groups are lacking. Additionally, the number of foreign workers, which reached an all-time high of 920,000 last year, continues to rise,” the consortium stated.

With these target groups in mind, the consortium plans to develop well-tailored financial services for them, such as larger font sizes for people with vision difficulties and specialized credit evaluation models.